Archive for the ‘Rick Wagoner’ tag

Senate Republicans slammed the brakes on a $14 billion bailout for beleaguered automakers GM and Chrysler. According to the Detroit News, wage concessions that lawmakers sought from UAW workers, which would bring salaries in line with what Honda and Toyota employees are paid, proved to be the major sticking point. While the UAW agreed to givebacks it wouldn’t commit to a specific date.

It isn’t a done deal though as President Bush could still direct funds from the $700 billion Wall Street bailout to the automakers. GM has said it needs $4 billion this month and next month to survive while Chrysler has said it needs $4 billion to survive through the end of March.

As of this writing the market is still closed, but this might not be the day to check on your 401k. I’m going to spend the rest of the morning deciding if I’d rather spend my golden years working at Wal-Mart or Target.

I’ve held back on this issue (until now) and let all of youse guys have your say but, personally, I’m in favor of extending loans to Detroit, though I’m not in favor of leaving the current and ineffective management of General Motors in place.

As part of the conditions for receiving any money from taxpayers, Congress should demand that Rick Wagoner and Robert Lutz step down.

Lutz, who is GM’s vice chairman of global product development, on Monday told CNBC that blaming Wagoner for GM’s woes is like blaming the mayor of a city that’s been hit by an earthquake. Lutz loves to speak in clever quips and soundbites and he’s a darling of the automotive media, most of whom are enamored by his tough talking “I’m a car guy” persona. At a press conference in New York, just before he proudly pulled the wraps off the pathetic Saturn Ion, I heard him tell reporters that blaming GM for the public’s desire to buy big SUVs is like blaming the clothing industry for the national obesity epidemic.

Cute. Stupid and irresponsible. But cute.

I enjoyed Lutz’s latest analogy as well but I don’t think it goes far enough. Blaming Wagoner for GM’s problems is sort of like blaming the mayor of a city that’s been hit by an earthquake. But as mayor Wagoner apparently had absolutely no emergency plan in place in the event of a disaster and the sort of construction he allowed in his city crumbled like a house of cards when the earthquake struck.

I guess that makes Lutz the chief of the planning board or building department who encouraged the construction of big, overpriced, inefficient McMansions with no foundations.

GM submitted a plan to Congress today asking for up to $12 billion in federal loans as well as a $6 billion line of credit that the company could draw on as needed. GM says it would repay its debts by 2011.

How? With major changes, none of which are unexpected. Here are some of the highlights as we got them this afternoon…

Pontiac would become a “specialty brand” with limited offerings through Buick and GMC. Hummer could be sold and Saab is also under consideration. Additionally GM says it will “talk with Saturn dealers about alternatives to the Saturn brand.” Which means that company too could either be closed down or sold off.

GM’s Chairman and CEO (assuming that position is still occupied by Rick Wagoner after all of this is over) will reduce his salary to $1 per year and changes in existing labor contracts—including job security provisions, paid time-off, and post-retirement health-care obligations—will be proposed to workers. The latter are obviously aimed at so-called “legacy costs” which domestic automakers say adds to the price of every car built and puts them at a disadvantage against Honda and Toyota who build vehicles in plants here without UAW labor.

As an interesting side note, GM today also clipped the wings of its private jet fleet and will cancel the lease on its hangar space at Detroit Metro Airport. Wagoner will reportedly drive to Capitol Hill to meet with Congress in a Malibu hybrid. Ford meanwhile is asking for up to $9 billion in bridge financing, but officials say they might not need to access the loan.

“For Ford, government loans would serve as a critical backstop or safeguard against worsening conditions, as we drive transformational change in our company,” said Ford President and CEO Alan Mulally.

Ford also said it expects to either break even or be profitable in 2011. Ford said it is also exploring the possible sale of Volvo. Since 2007, Ford has sold Aston Martin, Jaguar, Land Rover and the majority of its stake in Mazda. Ford said it will improve the fuel economy of its fleet an average of 14 percent for 2009 models, 26 percent for 2012 models and 36 percent for 2015 models – compared with the fuel economy of its 2005 fleet. Ford previously announced two plant closures this quarter and four additional plant closures between 2009 and 2011 and reduce its dealer base by 606 dealerships.

In a bold move aimed at making the foundering automaker solvent until a government-backed loan agreement can be reached, sources have told Hemmings Motor News that General Motors will suspend all new car manufacturing and, using a revolutionary process it calls “rebadgeneering,” build its 2009 inventory entirely out of popular “preowned” automobiles.

Pictured above is a spy photo of a prototype mule reportedly called the “Chevy Volmonter,” outfitted with the optional “Peacenick” hood decor package, spotted at a discount department store near Hemmings HQ in Bennington, Vermont. An unnamed source close to the project said that this example is very close to the production version except that, “Before the cars hit showrooms we’ll fog some Krylon over the rust and fill in any of the bigger holes with Great Stuff. You know, so they’ll pass inspection.”

In fact, said source was carrying a bag of spray paint and spray foam insulation at the time of the interview.

While the move will certainly result in the loss of thousands of high-paying jobs, and billions of dollars in revenue worldwide, GM Chairman and Chief Executive Officer Rick Wagoner speculated that, “Congress should have one less lame excuse to throw at us when they see me, Nardelli and Mulally roll up to Capitol Hill in some college kid’s clapped out old Volvo with a Chevy emblem slapped in the grille.”

A UAW spokesperson refused to comment on the reported plan which one unnamed union official referred to as, “Complete and utter stupidity fabricated by somebody with too much time on his hands.”

Henry Ford was many things to many people, but the thing I most admire about him (besides his great baseball swing, apparently) was his straightforwardness. Would you see anything like the picture above today? Would you ever see Tom LaSorda or Rick Wagoner taking an axe to their products to demonstrate the product’s resiliency?

Sixty-five years ago today, Ford received a patent for a method of constructing automobile bodies out of plastic. Reading that led me to think of this fairly famous picture of Ford swinging an axe into the plastic decklid of a 1941 Ford. According to accounts, the decklid never broke, not even on the second swing, but the axe itself broke, preventing further swings.

Back in 1972, Michael W.R. Davis, a PR man for Ford at the time, wrote an account of Ford’s venture into plastic bodies in the early 1940s for Special Interest Autos (#11). According to Davis’s article, the whole venture started when Ford entered his Greenfield Village Trade School, spotted a book about soybeans, read it cover to cover and then demanded his young Trade School students – hard at work on developing other farm products into industrial uses – to drop everything and start working on soybeans.